As Republicans strategize on tax reform, some see benefit of pairing it with infrastructure

As Republican leadership vows to push forward with federal tax reform, some members of their party are urging them to pair the potentially high-profile piece of legislation with infrastructure investment.

At a panel discussion Wednesday with other lawmakers about the future of American infrastructure, Rep. Ted Yoho (R-Fla.) said he believes that such a pairing could help Republicans stand on solid footing as they approach midterm elections next year.

Yoho, a member of the House Freedom Caucus, acknowledges that the idea of combining two immense issues at the same time is a contentious proposition within his party.

“When I came up here, everybody said, ‘Well, we can’t do [infrastructure] now because we’re going into the midterms.’ … Damn the election, do what you have to do to get the stuff done for this country,” said Yoho at the panel, which was hosted by Bloomberg Government. “I’m not worried about the next election — I’m worried about what we’re doing. Get the infrastructure done, and if you do your job, I don’t think you have to worry about the election.”

That’s one of the reasons why the House Freedom Caucus opted to send a letter to House Speaker Paul Ryan earlier this month, urging him to cancel August recess so that Congress can make significant progress on tax reforms and other priority bills, Yoho said. He said he has also pushed for the Freedom Caucus to include infrastructure in its forthcoming tax reform proposal.

“I’ve proposed that. We’re discussing that,” Yoho said.

“My money’s on Ted to make it happen,” quipped Rep. Rodney Davis (R-Ill.), another member of the panel.

Davis, too, said he sees some sense in seriously considering whether to package those issues together.

“All of us would love to see infrastructure and tax reform paired up, but since it’s just beginning, let’s see that debate. I agree, we ought to be able to get things done,” Davis said. “Congress ought to be able to walk and chew gum at the same time, and deal with more than one issue at one time.”

And it’s a view that’s held on the other side of the aisle, too. Rep. John Delaney (D-Md.) said told the panel infrastructure investment could be a deal sweetener to help Democrats see opportunity for compromise on a tax reform package that would otherwise likely be a lightning rod of opposition.

If tax reform and infrastructure are tackled sequentially, instead of tied together in one legislative package, Delaney warned that Republicans’ efforts on infrastructure could fall short. If the battle for a tax reform bill ends in failure, Delaney said, there would be no will goodwill or momentum left to tackle infrastructure before the 2018 midterms. If tax reform passes, Delaney said he’s skeptical there would be enough money left in the federal budget to make any meaningful dent in the country’s growing infrastructure needs.

“I think if they combine them into one package in Congress, the likelihood of doing infrastructure increases,” Delaney said. “I think if tax reform is done first on it’s own, with the view that infrastructure would be done after tax reform, I think the chances of that happening are very low.”

But regardless of what tack Republicans take in terms of timing an infrastructure investment bill, advocates like former U.S. Secretary of Transportation Ray LaHood are wary that such a package will rely too heavily on public-private partnerships, rather than providing actual dollars from the government dedicated to repairing roads and bridges, improving ailing transit infrastructure and investing in new capital projects.

“We need about five pots of money. Public-private partnerships, fine. But you’re not going to get to a trillion dollars over the next 10 years with just three public-private partnerships. You can’t,” LaHood said on another Bloomberg panel, as he urged Congress to raise federal gas tax. “Congress needs to debate seriously how to find a big robust vision for infrastructure.”